Windows will not shrink my drive? [duplicate]

My goal is a dual boot Linux/Windows 7 PC. It already has windows 7 on drive C, on a 3Tb drive.

I first defragmented this drive, then shrink the drive c partition to the maximum allowed.

The drive is now 1037.17 Gb, but only 42.9 Gb is used space. I only want to use 120 Gb for windows.

When I try to shrink it, after also defragmenting, the system says:

Size available shrink space in MB: 0

I've made a system backup to an external drive and a DVD repair disk.

Can I just trash this partition and restore it to a newly created 120Gb partition?

Odds are, there's probably some file that can't be moved, presumably due to it being in use. I would simply boot into a your Linux installation medium. Depending on your distro, the installer might allow you to resize your partition. IF not, are several partition management programs out there. Some will install themselves into Windows, and change your partition sizes during reboot, in much the same way as a checkdisk. Or, there are programs out there that will come in the form of bootable media, such as GParted.

Personally, I recommend GParted, as it's the only one I've ever personally used. You can quite easily burn it to a CD, boot from it, set up your partitions as you see fit, and start installing your Linux distro of choice.